HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.618 OF 2014 DATED:8.10.2014 Between:
The Commissioner of Income Tax-IV Hyderabad … Appellant And M. Jaganmohan Reddy … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.618 OF 2014 JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dt.23.2.2007 on the following suggested question of law:
“Whether, in the facts and circumstances of the case, the Tribunal was correct in law in setting aside the order passed u/s. 271(1)(c) of the Income Tax Act?”
We have heard Sri J.V. Prasad, learned counsel appearing for the appellant – Revenue, and gone through the impugned judgment of the learned Tribunal.
It appears that the learned Tribunal on fact found that pre- condition for initiation of penalty proceedings are not satisfied. It was recorded as follows:
“Unless and until there is concealment of income or the assessee furnished inaccurate particulars, the A.O. cannot levy penalty under Section 271(1)(c) of the Income Tax Act.”
We are in full agreement with the aforesaid reasoning. The learned Tribunal thereafter on fact found as follows:
“It is not in dispute that the assessee has furnished the full particulars and details of the creditors including the confirmation letters and also expressed his inability to produce the creditors. Therefore, in our opinion, the A.O. should have summoned the creditors for examination under Section 131 of the Income Tax Act. Without the A.O. making any further investigation, we cannot presume any concealment on the part of the assessee.”
Section 271(1)(c) of the Income Tax Act, 1961, which is reproduced hereunder would also provides to the same effect.
“Failure to furnish returns, comply with notices, concealment of income, etc.
271(1). If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person –
(a) … … …
(b) … … …
(c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or …”
Therefore, we dismiss this appeal. There will be no order as to costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J 8.10.2014 bnr